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Is a new wave of bankruptcies coming to the textile industry?  

TopicalIs a new wave of bankruptcies coming to the textile industry?  

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The textile sector, one of the sectors most affected by the contraction in global demand, increasing costs and inflation, is experiencing difficult times. One after the other, the well-established companies of the sector in Türkiye are announcing concordat and bankruptcy. These include important manufacturers such as Emek Kumaş, Kale İplik and Üçyıldız Tekstil, which have been operating in the market for many years. In 2008, during the global crisis, many textile enterprises were closed down and these companies were seized by banks in return for their debts. Market experts explain that a similar situation will not occur in the coming period, but businesses that fail to overcome their problems will continue to close down. 

Emek Global Tekstil Sanayi ve Ticaret Limited Şirketi, Emek Kumaş Dış Ticaret İnşaat ve Sanayi A.Ş. and Emekteks Dış Ticaret Limited Şirketi under Emek Group, whose foundation dates back to 1957, have requested concordat. Bakırköy 2nd Commercial Court of First Instance appointed a temporary concordat commissioner committee of 3 people to the company. Founded in 1980 and one of Türkiye’s leading fabric and yarn manufacturers and suppliers, Emek Kumaş manufactures fabrics for brands such as Marks and Spencer, Gerry Weber, Koton and Tom Taylor. 

Kale İplik Sanayi ve Dış Ticaret A.Ş., Fırat Elyaf Sanayi ve Ticaret A.Ş. and Fiberteks Tekstil Sanayi ve Dış Ticaret A.Ş. were among the other companies requested for concordat. Tekirdağ Commercial Court of First Instance granted a three-month temporary respite for the companies and appointed a commissioner for the supervision of company activities. Kale İplik A.Ş. is the main company of the group and its main field of activity is yarn production. Fırat Elyaf A.Ş., the other company of the group, produces raw materials through recycling, while Fiberteks Tekstil San. ve Dış Tic. A.Ş. operates domestic and international marketing of manufactured yarns. The Group employs a total of 500 people in hese fields of activity. The company exports 70% of its total production to more than 50 countries from different parts of the world, mainly Europe, the Middle East and the USA, and sells 30% of it in the domestic market. 

With the decision of the 11th Civil Chamber of the Antalya Regional Court No. 2019/667 E. 2020/362 K., Üçyıldız Tekstil Giyim San. ve Tic. Ltd. Şti. was decided to be bankrupt.  

Is a new wave of bankruptcies coming to the textile industry?    Image Source: Emek Kumaş
Turkish textile industry expects urgent support from the government  Image Source: Emek Kumaş

Turkish textile industry expects urgent support from the government 

The Mediterranean Textile and Raw Materials Exporters’ Association (ATHİB) Chairman of the Board of Directors Fatih Doğan stated that the increase in costs, decrease in purchasing power, decrease in demand and high inflation have deeply affected the sector and that they expect an urgent support package from the government. Pointing out that the Turkish textile industry has largely lost the gains it has achieved in international markets to Indonesia, Turkmenistan, Uzbekistan, Bangladesh and China, Doğan noted that most of the factories producing yarn in Türkiye have closed down, while the enterprises struggling to survive can operate with a capacity of 30 percent. 

“Turkish cotton has become the cheapest cotton in the world” 

Fatih Doğan also commented on the effect of this situation on cotton prices: “In the current situation, the crisis that emerged because the spinning mills had a very difficult time surviving and maintaining their production also affected the cotton market. Since our factories cannot manufacture, they cannot buy the cotton of the producers. Our producers are also trying to export their cotton abroad at the price they can find, which naturally leads to a decrease in prices. Now, Turkish cotton has become the cheapest cotton in the world.” 

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